Two short lines, and a lot packed into them. The title, "War dance," sets up an image of movement and rhythm, something almost festive, and the poem then turns that image sour. War, the speaker says, "gives the world an ill music." The word "ill" is doing double duty here: the music is unpleasant, but it also sounds sick, as if the whole world has caught something and is moving to a diseased tune.
The second line is the sharpest. This music is "in praise of the mad." Instead of honoring the wise or the brave, war celebrates people who have lost their reason, and perhaps suggests that war itself is a kind of madness we end up applauding.
The speaker doesn't shout or describe battle. The tone is cool, dry and judgmental, like a verdict. That restraint makes the mood unsettling: the poem is quiet, but the idea of everyone dancing to a crazed song lingers long after the last word.